Would you be convicted?
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17 August 2013 - 22:54, by , in Activity-Based Cost Management, No comments

If you were on trial for doing Activity Based Management, would they find enough evidence to convict you?

Many people are familiar with ABM and ABC.  But “knowing about ABM” is not the same as “knowing ABM”.   Reading a book on marriage is not the same as spending time with one’s spouse. Knowing someone’s phone number is a far cry from enjoying friendship with that person.  Knowing about God is much different than knowing God.

Here are questions that you and your organization could expect from an interrogator to determine if your ABM involvement is circumstantial or convicting:

  • Can you and every member of your senior management team explain the basic principles of Activity Based Management?

When I worked at Motorola during their successful journey to achieving six-sigma quality (3.4 defects per one million), every manager could explain the principles and benefits of Total Quality Management in five minutes of less. If your management team does not understand ABM, how do you ever expect the employees to embrace and use it? Has your senior management team been trained “how to” read, interpret and use ABM reports? If not, why not?

  • Do you consistently issue monthly or quarterly ABM reports?

Repetition is a requirement for competency. If I play golf only 1 or 2 times per year, I will not remember the rules or the best techniques to optimize and enjoy my game. Organizations that have been the most successful with achieving benefits with ABM have made activity measurement a regular routine. Regular measurement is a strong indication of your commitment to ABM. If you want activity cost improvement, you must repeatedly measure activity performance. Keep a journal of ABM success stories in your organization. If you cannot point to positive, quantifiable results from your ABM system, you will not be convicted.

  • Do you hang out with other ABM’ers?

The February 16, 1999 issue of USA TODAY reported that 73% of Americans say that religion is an important part of their life but only 12% of those people surveyed attend church weekly. Being with other believers on a regular basis keeps you committed, encouraged and accountable. Attend at least one ABM conference per year. Form a local ABM User’s Group in your city. I hear of many groups forming. And develop an E-Mail chat group with fellow ABM’ers. E-Mail is great for problem solving and benchmarking.

Knowing about ABM is circumstantial evidence. Take steps today to make sure you and your organization is convicted.

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Tom Pryor
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